Alyson Miller is a CPA who provides specialized accounting and tax services to music and entertainment clients.  She is the founder of Alyson Miller, CPA PLLC a rock and roll accounting, tax, and business management firm. She has years of music business experience working for both independent and internationally recognized artist and songwriters, record labels, publishing companies and music distributors.  

As an indie artist you have no job security, no constant paycheck and no retirement plan.  You might not be able to do much about the first two but you can definitely do something about the last, the retirement plan.  As a self employed musician you can invest in your future and save on your tax bill all at the same time.

One of the best options for the self employed is the SEP-IRA (simplified employee pension-individual retirement plan).  Most likely you will be filing a Schedule C along with your 1040.  If that’s the case, you can put in as little as you like, up to 20% of your net Schedule C (maximum of $49,000 for 2009).  An advantage to the plan is that you can decide each year whether or not to contribute unlike other plans that require you to make contributions each year.

Another advantage to a SEP Plan is that they are easy to setup and administer.  It can be as easy as making a phone call to your local banker.  The costs for setting up and maintaining the plan are quite low in comparison to other plans. 

The contribution you make can really save you on your taxes too.  The amount contributed gets subtracted from your gross income as long as the contribution is made before the tax deadline (April 15^th or October 15^th if you file an extension). 

Lastly, always contact your tax advisor about making a contribution to any retirement plan. It’s always best to let them do the contribution calculation but consider the SEP as an option no matter how much or little money you make.  Even the smallest amounts saved or contributed can really make a big difference to your retirement future.